How much do you need for a day of *Freedom*?

by J. Money -

rainbow sunset

Caught this comment on the blog and had to run the numbers as soon as I saw it :)

In response to our post on what you would do with an extra $1,000:

Well, I kinda don’t need the $1,000 so I would invest it and get myself four days closer to FIRE as we are budgeting about $240 a day when we do blow this popsicle stand! 4 days of additional freedom!!! Woo hoo!!

– The Crusher

A guy who knows what every day will cost him – awesome!!! And a fun break from always focusing so much on The Number we’re shooting for to get a *lifetime* of freedom.

I stopped what I was doing when I saw this and headed straight for my monthly budget spreadsheet, and after dividing our total monthly spend ($7,300) by 30, it popped out OUR Daily Freedom Cost as well…

Which came out to roughly $243/day – almost the same as Mr. Crusher up there! Which admittedly did not excite me because that’s a looooooot of money for everryyyyyyy day of our future lives, however, it then dawned on me that this is our *current* spending and not *future* FREEDOM spending, which after some tweaking dropped it down pretty substantially.

After deleting our mortgage and daycare costs and one or two other little things in our budget we’ll no longer need in retirement, our monthly spend dropped to $4,200/mo which brought down our total cost per day to a more respectable $140/day. Essentially doubling our Freedom Days to a little over 7 which is an entire WEEK of freedom! A hell of a lot more exciting than just a few days! Haha…

(Though we still have more work – and shaving – to do until I’m entirely happy ;) Would love to get it down to only $50/day but not sure how possible that is with 3 kids in tow? Or health insurance down the road? Or any other fun new hobbies/travels we get into?)

Still, a fun exercise to do to better put things in perspective – try it out! And then add it to your monthly spreadsheet/tracking so you can watch it change over the years!

I just did :)

{ 24 comments… read them below or add one }

1 Francis November 11, 2019 at 8:18 am

I’ve been doing this same calculation for years. When I was striving to reach for FIRE, my daily spend was $200/day. That included everything, the whole spending nut. Now at FAT FIRE, we’ve loosened up a bit and have a 5 year daily spend an average of $221/day.
I also have a new W-2 gig which helps plow the 401k money and match into a new account. Spending has loosened up to enjoy being in the FIRE moment even more.

Reply

2 J. Money November 11, 2019 at 9:04 am

Nice!!! That’s often a hard thing to do for us saver addicts…. Such a better balance of life when you can get more comfortable spending like that.

Reply

3 whiskey November 11, 2019 at 8:40 am

Yeah I wasn’t sure I wanted to run the numbers since we moved across a couple of states and bought a house. All the expenses can really skew but none the less, its a good exercise:
395 ytd. (thats based on 365 and the years not over yet) ((buying a home, moving exp, this that and the other) Figure itll go over 400 a day by years end as there’s still some expenses that need to be covered (you can do all the planning you want but there’s still always something that pops up, ughhh)
131 is the forecast for next year. Thats a much better number. I’d like to see us get down to about 100 per day. But Im sure there’ll be a few things thatll take it closer to our previous of 150-160. Realistically Im going to plug in 200 for things that we have to get used to in the new area: state taxes (groan), higher vehicle fees (this blows), higher col (knew this going in but still) and just having fun hiking and outdoor activities that we didn’t do previously.
All these numbers include investments. Its still an expense as it comes from our main source of income (but with better end results…) so you could take those costs associated out and it would come down more. (gross vs net) or (recognized vs realized)
I hate seeing the red numbers on the spreadsheet. Realistically there shouldn’t be any but staying the course; we will see a slow shift back to black.
So the real question is, is the higher expenses worth it? Ask me again come spring time but so far its been really fun and worth every penny.

Reply

4 J. Money November 11, 2019 at 9:06 am

Making a calendar item to ping you then ;)

With a much lower daily spend next year though, I’m sure you’ll be sitting – and feeling! – pretty good…

Reply

5 Adam November 11, 2019 at 9:13 am

Factoring in a $1k/mo travel/restaurant/entertainment budget, $136.75 for the both of us in 2019 dollars!

Unfortunately, that doesn’t take into account home maintenance — no small figure on our 98-year-old house. We intend to have all major work done by that point: reasonably new systems, a shiny new metal roof, trees removed as necessary, possibly a solar array on the south-facing back half. I am not looking forward to those bills… but with a decade to plan, I think we’ll do alright. And I’m looking forward to painting and DIY fixes on my own schedule, rather than eating up whatever weekend happens to be neither raining nor too busy.

Reply

6 J. Money November 11, 2019 at 12:17 pm

Haha yeah….

Would love to hear more about those solar panels though if you end up going with it. I keep meaning to look into it myself as we get a TON of sun and could probably power the entire neighborhood, but def. afraid to hear of the upfront costs too :)

Reply

7 Adam November 11, 2019 at 12:58 pm

It’s almost the perfect situation for us — our little cape cod has a great roof tilt angle, and once we clear out a tree or two we’ll get a good bit of sun. But we switched to gas heat and a gas tankless water heater earlier this year… so our normal electric bills now average ninety bucks a month rather than two or three times that. We’ll have to run quite a cost benefit analysis to determine whether it’s worth our while.

Reply

8 J. Money November 12, 2019 at 7:03 am

Never sucks whipping out another spreadsheet! ;)

Reply

9 Financially Fit Mom November 11, 2019 at 9:41 am

I used to know this and it helped keep me in check. I don’t know where or why I lost it over the years, but thank you for the reminder! I’ll have to math that shit up!

Reply

10 J. Money November 11, 2019 at 12:17 pm

Haha…. Math it up, baby!

Reply

11 Caroline Carlson November 11, 2019 at 10:32 am

Interesting! We’ve done it to see monthly expenditures to see how life with the dual pensions of 22yr Navy and 20 yr Full time Firefighter would shake out. I have mortgage planned to end right about when Firefighter years end, 6 more years.

Reply

12 J. Money November 11, 2019 at 12:18 pm

Well don’t keep us in suspense!! What’s the number???! ;)

Reply

13 Caroline November 11, 2019 at 3:01 pm

I get a daily of $102.00! I’ve run the #’s twice so, definitely interesting to know:)

Reply

14 J. Money November 12, 2019 at 7:04 am

Hot. Damn.

Reply

15 Joe November 11, 2019 at 11:04 am

Cool calculation. Although, I’d keep that mortgage. The interest rate is so low, it’s better to invest the money.

Reply

16 J. Money November 11, 2019 at 12:19 pm

Logically you’re right, but emotionally it’s a lot less exciting ;)

Reply

17 debrak November 11, 2019 at 1:12 pm

I came to the fire movement late and will be ecstatic to retire or semi-retire a little past the traditional age. But I figured out how much we will actually have . . . $175/day and will be happy to live within that budget!

Reply

18 J. Money November 12, 2019 at 7:04 am

Awesome :)

Reply

19 BC | FrugalWheels November 11, 2019 at 1:17 pm

OK, going to sound super braggy, but my dollar per day amount is $57.50. (This includes my mortgage, with about 10 years left.) That $1,000 would be about 17 days!

But, one thing missing from the calculations is compound interest. Depends on how long it will be invested, of course, but it’s at least worth a few more days, so I’m going to say 20 days.

But then THAT assumes that you’re going to spend it down, earning no interest in retirement, so I’m not sure this calculation has a lot of meaning.

A number I liked a lot better (by someone a lot better at math than I): every $300 invested is $1 per month in retirement (pretty sure using the 4% rule). So, that $1,000 is a little more than $3 extra bucks every month!

Reply

20 J. Money November 12, 2019 at 7:08 am

Killin’ it!!

Never heard of that 300 rule but going to marinate on that…. Not sure how much $1/mo will motivate me though, lol…

Reply

21 The Crusher November 11, 2019 at 2:03 pm

I am highly honored that J. Money chose my comment to highlight.

In my mind my calculation is really a bit of an extension from the real hourly wage concept that is so beautifully discussed in Your Money or Your Life. So I will share credit to those brilliant authors. I am just looking at how many days I am buying back of my freedom. We probably will be under $240 figure but I prefer to plan with some “fat” in the figure so that any surprises will hopefully be happy ones (we spend less than planned). It is a margin of error that we hope provides some safety.

And FYI – we too plan on escaping our mortgage just before making our FIRE move. We are actually paying it down at an increasingly accelerated rate. There is a peace of mind aspect to doing so but it is also like paying ourselves a risk-free 3.125% rate of return. Can you find that elsewhere? We are also investing in the market monthly so we do have a balanced approach.

Great discussions!

Reply

22 J. Money November 12, 2019 at 7:11 am

Thanks for the inspiration, sir! And I agree w/ the peace of mind there heading into retirement… One less thing to manage, too :)

Reply

23 Liz November 12, 2019 at 10:24 pm

We are already at $138 a day including the mortgage. We don’t make a lot but we save a good percentage of what we do make :-)

Reply

24 The Crusher November 13, 2019 at 7:29 am

Seeing how low some of these folk have gotten there costs is inspirational. I know we could do better on a number of things. We have been slowly ratcheting down some expenses the past few years and spending more mindfully. I guess if I am honest with myself there are only two things holding us back from being more aggressive:

I do not want to freak out my dear wife who is not so sure she completely gets this “FIRE thing”. That is, I would like to be allowed to sleep inside at night!

I, myself, kinda don’t want to reduce some of the big areas like travel. I know I should but ugh…

My best suggestion for anyone who really wants to get at their spending is to measure it. Measure every single transaction, every day, every month. We use Personal Capital to do so but there are others as well or you can go old school and do it yourself. Measuring your detailed spending is a VERY worthwhile activity.

Reply

Leave a Comment

Previous post:

Next post: